Out-of-town property market continues to evolve
Canada’s recreational property market continues to transform itself, most recently the beneficiary of record-low interest rates, a new wave of retiring baby boomers and a favourable exchange rate, according to a recent survey.
The 2016 RE/MAX Recreational Property Report, which surveyed RE/MAX agents and brokers, noted the low Canadian dollar is having a positive effect on the country’s recreational property markets. Canadians, mainly boomers, who bought properties in the U.S. when U.S. real estate prices were comparably low are selling them at a profit and investing in Canadian recreational markets, it said.
The RE/MAX survey signaled out Canmore and Sylvan Lake as two of Canada’s top recreational property destinations. It noted retirees seeking an active lifestyle continue to be an important driver of demand in Canmore, where the median price (May 2015 to April 2016) was $533,090.
Buyer demographics in Sylvan Lake, meanwhile, are beginning to shift from older baby boomers to younger families as a more active sect look for four-season properties close to amenities and activities. The survey noted the lakefront town continues to offer a good selection of properties, with prices softening with the downturn in Alberta’s economy. The median price for waterfront and non-waterfront homes between May 2015 and April 2016 was $389,000 and $340,000, respectively
To the west, the Okanagan Valley was praised in the RE/MAX survey for its diversity of housing options that appeal to both budget-conscious and ultra-luxurious recreational property buyers.
Rising prices on the Lower Mainland are driving more buyers into the interior, noted the survey, adding soon-to-be retirees are purchasing their future homes now to take advantage of today’s prices and renting them out until they are ready to settle into retirement.
“As the large demographic of baby boomers retires, sellers who benefited from significant price appreciation … are putting that equity into recreational markets,” read the survey. “This effect has been especially pronounced in British Columbia, where significant price increases in the Lower Mainland are encouraging buyers to invest in regions such as the Okanagan and the Gulf Islands.”
“While our Alberta neighbours continue to be a significant portion of buyers in the Okanagan, their numbers have dropped off in the past year, for sure.”
The RE/MAX reported noted the median price of a waterfront property in the valley between May 2015 and April 2016 was $382,283, with water access being $426,000 and ski-in $515,000.
Okanagan Mainline Real Estate Board (OMREB) confirms the trend of increased action from in-province buyers, noting Okanagan Valley is welcoming more people from the province’s Lower Mainland and other parts or B.C., and fewer from the eastern side of the Rockies.
OMREB reports at the nearly six of 10 homebuyers so far this year are existing residents of the Okanagan region, followed by 17 per cent from the Lower Mainland or Vancouver Island — and 12 per cent from Alberta.
“While our Alberta neighbours continue to be a significant portion of buyers in the Okanagan, their numbers have dropped off in the past year, for sure,” said OMREB president Anthony Bastiaanssen.
Steve Shoranick, founder of residential developer MKS Resources, said the appeal of the valley is still strong, despite the fact many Albertans are feeling the pinch of a weakened economy.
“I guess I’m a bit surprised at the strength of our Alberta sales. Even with the bad economy, people are buying here after deciding to retire, to move on with their lives,” he said from the sales centre of the company’s latest venture Water’s Edge North.
Project sales manager Bonnie Kaufmann noted Albertans bought about 35 per cent of the first phase, along with three more in the 16-unit second phase.
“They are still buying, perhaps not at the same pace, but they are still a part of the success of the project,” she said of the development located in the Mission district of Kelowna off Lakeshore Road and a block south of the Eldorado Hotel.